Case Study

Comprehensive controls review leads to lower FCPA risk and easier controllership worldwide for a global footwear and sports apparel manufacturer

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Client:
Global footwear and apparel leader

Industry:
Consumer goods

Business need:
Build a framework for assessing and improving the client’s control environment and levels of compliance with anti-corruption laws in multiple countries

Genpact Solution:
Conducted an in depth risk assessment and due diligence screening review of vendors for high risk countries. Leveraged the findings to build a robust compliance and governance mechanism

Business impact:

  • Reduced FCPA risk
  • Increased compliance

A leading American multinational engaged in the design, manufacture, and global retail of footwear and sports apparel found itself exposed to a significant risk of non-compliance with anti-bribery laws within many of the more than 150 countries in which the company operates. Genpact conducted a thorough screening of vendors in high-risk countries, performed risk assessments to identify control gaps in key high-risk processes, and designed a comprehensive framework for anti-corruption monitoring to drive tighter compliance.

Business challenge

Working in more than 150 countries exposed the company to a significant risk of violating various anti-corruption laws such as the foreign Corrupt Practices act (FCPA). Compliance was complicated by:

  • No mechanism for screening new vendors or evaluating the client’s 120,000 existing vendors for FCPA compliance
  • Ineffective risk assessment processes in place to identify and mitigate anti-corruption risk across critical processes
  • Inadequate monitoring of high risk spends, T&E expenses, and promotional products

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Genpact solution

After a thorough risk assessment in seven high-risk countries, Genpact created a robust regulatory compliance and governance framework designed to mitigate corruption risk. Genpact leveraged its relationship with Lexis-Nexis to design and build a more comprehensive vendor screening process and compliance framework with built-in data analytics that includes:

1. Vendor screening process

  • Screened a database of approximately 120,000 vendors in high-risk territories to identify and eliminate vendors involved in bribery
  • Reported potential true hits for review and action
  • Screened all additional vendors after the initial review
Delivered a robust FCPA compliance and anti-corruption monitoring framework

2. Risk assessment

  • Identified control gaps in key high-risk processes such as T&E, gifts, donations, and complimentary/promotional products, and performed sample testing for operational effectiveness
  • Identified root causes for control gaps and recommended a comparative framework to formulate guidelines for mitigating corruption risks

3. Data analytics

  • Performed FCPA analytics on the T&E and complimentary/promotional product categories to identify and understand FCPA red flags
Genpact created a robust regulatory compliance and governance framework designed to mitigate corruption risk

Business impact

Genpact delivered significant savings to the customer by:

  • Identifying 24 potential blacklisted vendors doing business worth $10 million with the company
  • Eliminating blacklisted vendors, which saved the company millions of dollars in penalties

In addition, Genpact:

  • Identified potential leakages in the marketing process, which risked the illegitimate issue of complimentary products
  • Created a framework for periodic screening to report FCPA sanctions for existing vendors, and recommended screening for new suppliers
  • Delivered a robust FCPA compliance and anti-corruption monitoring framework
  • Enabled an enhanced control and compliance environment

For more information, contact: cfo.services@genpact.com and visit, genpact.com/what-we-do/business-services/enterprise-risk-compliance/anti-bribery-anti-corruption-compliance

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